Reward and punishment in transactional leadership

Salary 8 Transactional Leadership Advantages and Disadvantages One of the leadership styles applied by leaders and top echelons of management is transactional leadership, also referred to as managerial leadership. First described in by Max Weber, this practice is centered on the management process that involves controlling, organizing and short-term planning. This style follows the principle of reward and punishment in which an act that is good will merit a reward while the opposite can result to a disciplinary action.

Reward and punishment in transactional leadership

People are motivated by reward and punishment. Social systems work best with a clear chain of command. When people have agreed to do a job, a part of the deal is that they cede all authority to their manager.

The prime purpose of a subordinate is to do what their manager tells them to do. Style The transactional leader works through creating clear structures whereby it is clear what is required of their subordinates, and the rewards that they get for following orders.

Punishments are not always mentioned, but they are also well-understood and formal systems of discipline are usually in place. The early stage of Transactional Leadership is in negotiating the contract whereby the subordinate is given a salary and other benefits, and the company and by implication the subordinate's manager gets authority over the subordinate.

When the Transactional Leader allocates work to a subordinate, they are considered to be fully responsible for it, whether or not they have the resources or capability to carry it out. When things go wrong, then the subordinate is considered to be personally at fault, and is punished for their failure just as they are rewarded for succeeding.

The transactional leader often uses management by exception, working on the principle that if something is operating to defined and hence expected performance then it does not need attention. Exceptions to expectation require praise and reward for exceeding expectation, whilst some kind of corrective action is applied for performance below expectation.

Whereas Transformational Leadership has more of a 'selling' style, Transactional Leadership, once the contract is in place, takes a 'telling' style.

Discussion Transactional leadership is based in contingency, in that reward or punishment is contingent upon performance. Despite much research that highlights its limitations, Transactional Leadership is still a popular approach with many managers.

Reward and punishment in transactional leadership

Indeed, in the Leadership vs. Management spectrum, it is very much towards the management end of the scale. The main limitation is the assumption of 'rational man', a person who is largely motivated by money and simple reward, and hence whose behavior is predictable.

Transactional Leadership - Outdated?

These theories are largely based on controlled laboratory experiments often with animals and ignore complex emotional factors and social values. In practice, there is sufficient truth in Behaviorism to sustain Transactional approaches.

This is reinforced by the supply-and-demand situation of much employment, coupled with the effects of deeper needs, as in Maslow's Hierarchy. When the demand for a skill outstrips the supply, then Transactional Leadership often is insufficient, and other approaches are more effective.As mentioned, transactional leaders operate in a reward and punishment system to motivate team members, and often, the motivation is external.

This means that subordinates are rewarded with something ‘substantial’ (e.g. cash, gift certificate, etc.) for doing the desired behavior, and punished for any deviation. Advantage of Transactional Leadership. 1.

Relationships between leader reward and punishment behavior and subordinate attitudes, perceptions, and behaviors: A meta-analytic review of existing and new research Leader reward and punishment behavior is also the heart of what is called transactional leadership (cf. Avolio, , Bass, , Burns, , Howell and Avolio, ). As mentioned, transactional leaders operate in a reward and punishment system to motivate team members, and often, the motivation is external. This means that subordinates are rewarded with something ‘substantial’ (e.g. cash, gift certificate, etc.) for doing the . Punishment and reward motivate people and this underpins transactional leadership theories. There must be a well-defined hierarchy, where everyone knows who the leader is and who is following.

Employee Motivation Based on reward and punishment, this leadership style is effective in motivating employees in becoming productive and efficient members of . Transactional leadership is based on an outmoded concept of how people function in organizations.

the notion, that if an employee does what is desired, a reward will follow, and if an employee does not, a punishment or with holding of the reward will occur.

The relationship In addition to contingent rewards, transactional leaders are. Transactional leadership involves motivating and directing followers primarily through appealing to their own self-interest.

The leader believes in motivating through a system of rewards and punishment. Transactional leadership still remains to be popular among the leadership styles because of its reward and punishment principle that motivate employees to be productive.

However, it also has its share of criticisms because of the way it controls its employees’ performance and hampers the leadership and creativity skills of the workforce. As mentioned, transactional leaders operate in a reward and punishment system to motivate team members, and often, the motivation is external.

This means that subordinates are rewarded with something ‘substantial’ (e.g. cash, gift certificate, etc.) for doing the .

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